Rising consumer purchasing power is reviving demand for PTFE manufacturers' products
Los Angeles, CA (PRWEB) November 08, 2012
Polytetrafluoroethylene, commonly known as PTFE, can be repeatedly softened and hardened by alternately heating and cooling, which allows PTFE to make products nonstick, less likely to corrode and heat resistant, among other things. As a result, PTFE is used in many different manufacturing applications. Unfortunately for industry operators, the PTFE (Teflon) Coating Manufacturing industry experienced tough times during the past five years. Household product manufacturing, automotive manufacturing and industrial manufacturing sectors all struggled as a result of the recession and these effects hurt industry revenue. In the five years to 2012, industry revenue has increased at an average annual rate of 0.4% to $1.1 billion, says IBISWorld industry analyst Lauren Setar. Industrial production and manufacturing experienced significant demand declines over the five years to 2012. Cash-strapped consumers bought fewer manufactured goods and delayed many purchases during this time. Because industry products are used in so many applications, industry revenue plummeted. However, industry revenue has risen since 2010 due to a strengthening economy and improved consumer spending. Manufacturing activity picked up as consumers purchased more goods. As a result, industry revenue is expected to continue increasing 2.9% in 2012.
However, rising input costs have challenged industry operators over the past five years. For example, the price of crude oil, a key input for producing PTFE, has risen at an annualized rate of 8.0% over the past five years. Rising oil prices and volatile demand from key downstream markets have led operators to cut labor forces and close facilities, says Setar. However, due to these cost-cutting measures, profit margins increased slightly over the past five years. The PTFE (Teflon) Coating Manufacturing industry is estimated to have a moderate level of concentration. Market share concentration has remained relatively stable over the past five years. In general, revenue hikes are typically followed by more participants entering the market. Concentration in major cities is low; this is due to the industry's few PTFE manufacturing facilities in major cities, and the number of regulations that makes it uneconomic to create new facilities. As of 2012, DuPont is the only major participant. DuPont currently has domestic facilities in Florida, Delaware, Tennessee and Mississippi.
Industry operators have also faced increased regulation over the past five years amid concerns of harmful chemicals. Companies have shifted manufacturing operations accordingly and increased research and development efforts. For example, DuPont has created and commercialized new manufacturing technologies. In the five years to 2017, the industry is expected to benefit from increased manufacturing and consumer spending. Additionally, input prices are expected to continue rising, but operators will pass this cost on to consumers via higher prices. Consequently, IBISWorld expects industry revenue to rise. For more information, visit IBISWorld’s PTFE (Teflon) Coating Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures polytetrafluoroethylene (PTFE). Although PTFE is most well known by the brand Teflon, it is also made under more than 100 other brand names. PTFE has a wide variety of uses, including creating nonstick surfaces on cookware, acting as a lubricant and working as a chemical catalyst.
Key External Drivers
Industry Life Cycle
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Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
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Barriers to Entry
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